Tesla Whistleblower Attorney Says "I Would Short Tesla Based On What I Know"

On Wednesday we reported that Martin Tripp - the former Tesla engineer who on June 20 was sued by Tesla for allegedly trying to "sabotage" the company - accused Tesla of several egregious violations that, if proven, could crush the credibility of the automaker, and its CEO, Elon Musk.

As a reminder, in an email sent by Meissner Associates, the law firm which has represented whistleblowers to the SEC and which was retained by the Tripp, the whistleblower alleged that Tesla had

Placed batteries containing dangerous puncture holes in vehicles which proceeded to the end of the assembly line in a process known internally at Tesla as “Containment AR622” and which input into vehicles was tracked until the end of the assembly line process;

Overstated to investors the number of Model 3 vehicles being produced each week by as much as 44%. The whistelblower alleges that the famed factory board which reflects a daily Model 3 production count and often referred to by Tesla is inflated;

Lowered vehicle specifications impacting upon safety such as placing battery cells too close to one another and which were not properly affixed, risking future combustion; and

He also accused Tesla of placing battery cells too close together and not properly securing them, raising the risk of future combustion, as well as "systematically" reusing parts that had been deemed to be scrap or waste.

Then on Friday morning, in a surprising public address on Twitter, Stuart Meissner, who was retained as Tripp's counsel to defend Tesla's federal law suit against him and to countersue if he wants, tweeted in response to a Forbes article "Will Tesla Be 'Tripp'ed' Up By A Whistleblower", that it was "time for the @SEC_Enforcement to act. Not an accident @elonmusk has been silent on the allegations. Let sunshine be the cleanser for $TSLA"

But more interesting is that in response to a question whether he was short any Tesla stock, Meissner said "I have ZERO position on $TSLA short or long and never have. Although frankly I should, based on what I, and everyone, now knows."

That is correct - I have ZERO position on $TSLA short or long and never have. Although frankly I should, based on what I, and everyone, now knows.

Explaining why Tripp did not go directly to the SEC, the attorney said that "he & many did/dont know of the program. If it were up to me he would have gone directly there via us- likely would not have been sued. FYI-no such thing as "applying for whistleblower status."

He then provided another tantalizing tidbit: saying that when compared to the 6-year-old Monsanto litigation, which led to a $80 million fine and a whistleblower award, he said "the allegations here are much more serious"

I have NO plans to short Tesla or any other stock.Have not done so in years. In 6 years of the Monsanto SEC investigation which led to the 80 mil $ fine & whistleblower award I never shorted it. In fact, I was long at times. I do think the allegations here are much more serious

Finally, asked if he believes the whistleblower's allegations, Meissner said that "I obviously believe them to be true based on my experience and with what we have to work with, or I would not have accepted the case. Only the regulators who have power of subpoena can confirm for sure."

I obviously believe them to be true based on my experience and with what we have to work with, or I would not have accepted the case. Only the regulators who have power of subpoena can confirm for sure.

Finally, when discussing the especially public nature of this confrontation, Meissner explained that "most cases dont receive much publicity before there is an award or SEC action because most (all of mine) whistleblower client's are not known to the public. This case is different as Tesla rushed to tar and feather him before hehad a chance to go to the regulators or see a lawyer."

Earlier in the week, Meissner told CNBC that "it’s dramatic and serious as far as the materiality of the omissions and misstatements, and how they effect investors, and the general public regarding potential safety hazards of Tesla vehicles." He also said that he had never seen a company handle an employee who has raised issues internally in such an aggressive manner.

"To me, this indicates that they are trying to send a message not just to Martin Tripp, but to all employees that they should not speak up if they see something wrong."

Whether or not Tripp has a case, or whether Musk can continue to sleep soundly (on the factory floor), will depend on whether the SEC takes the whistleblower complaints seriously and launches a formal probe. For now, the regulators - in typical fashion - have yet to acknowledge that it may soon be stormy weather in Muskville.